Fairness in Foreign Filing Act
Latest action (30 Jul 2026): Introduced
What this bill does
**S. 5173 — Fairness in Foreign Filing Act**
This bill would amend the Internal Revenue Code to change how certain tax penalties are assessed and collected. It clarifies that penalties under the tax code generally may be assessed like taxes, with an exception for penalties normally enforced through civil or criminal court action. It also creates a new notice-and-review process for specified "covered penalties" — those tied to reporting requirements on foreign corporations, foreign trusts, foreign-owned businesses, and similar international transactions. Before assessing such a penalty, the IRS would have to mail written notice explaining the penalty, the relevant tax years, and the basis for it, and inform taxpayers of their right to seek review by the IRS Independent Office of Appeals. Assessment and collection would be paused while a taxpayer's review period or appeal is pending, except in cases where the IRS finds collection is at risk. The bill also repeals certain filing due-date requirements for information returns related to foreign trusts, effective for tax years beginning after 2026.
The bill primarily affects individuals and businesses with international financial activity — such as ownership interests in foreign corporations, foreign trusts, or foreign accounts — who may face IRS penalties for reporting failures. It gives them additional notice and a formal opportunity to contest penalties before they are collected.
The bill was introduced in the Senate on July 30, 2026, by Senator Sheldon Whitehouse with Senator Bill Cassidy as a cosponsor, and referred to the Senate Committee on Finance. It has not yet received a committee vote or further action.
Plain-English summary generated by Bill100 AI from the official record. Always verify against the source below.
Official summary
This bill is in the first stage of the legislative process. It was introduced into Congress on July 30, 2026. It will typically be considered by committee next before it is possibly sent on to the House or Senate as a whole.
Common questions
- What does S. 5173 do?
- **S. 5173 — Fairness in Foreign Filing Act** This bill would amend the Internal Revenue Code to change how certain tax penalties are assessed and collected. It clarifies that penalties under the tax code generally may be assessed like taxes, with an exception for penalties normally enforced through civil or criminal court action. It also creates a new notice-and-review process for specified "covered penalties" — those tied to reporting requirements on foreign corporations, foreign trusts, foreign-owned businesses, and similar international transactions. Before assessing such a penalty, the IRS would have to mail written notice explaining the penalty, the relevant tax years, and the basis for it, and inform taxpayers of their right to seek review by the IRS Independent Office of Appeals. Assessment and collection would be paused while a taxpayer's review period or appeal is pending, except in cases where the IRS finds collection is at risk. The bill also repeals certain filing due-date requirements for information returns related to foreign trusts, effective for tax years beginning after 2026. The bill primarily affects individuals and businesses with international financial activity — such as ownership interests in foreign corporations, foreign trusts, or foreign accounts — who may face IRS penalties for reporting failures. It gives them additional notice and a formal opportunity to contest penalties before they are collected. The bill was introduced in the Senate on July 30, 2026, by Senator Sheldon Whitehouse with Senator Bill Cassidy as a cosponsor, and referred to the Senate Committee on Finance. It has not yet received a committee vote or further action.
- Has S. 5173 become law?
- Not yet. As of 30 Jul 2026, S. 5173 is introduced.
- Who sponsored S. 5173?
- S. 5173 was sponsored by Sen. Sheldon Whitehouse [D-RI] (Democrat-RI), with 1 cosponsor.
- What's the latest action on S. 5173?
- Introduced (30 Jul 2026).
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